DIGGING IN

Turkey 2011 | ENERGY & MINING | FOCUS: MINING

Turkey has emerged as one of the most exciting destinations for mining in the world. Huge untapped reserves are in need of significant private investment, and new regulations are aiming to secure just that.

As one of the main industries supplying raw materials to the domestic market, Turkey's mining sector holds great significance for the country's development. The Ministry of Energy and Natural Resources holds jurisdiction over the industry, and the state is vested with exclusive rights over all minerals in the country. Individuals and corporations with legal status in the country, however, can apply for licenses granting exploration and mining rights. Baran Umut Baycan of Baycan Law Office told TBY that recently amended mining regulations are aimed at “[attracting] more domestic and foreign private investors into the industry."

According to the Export Promotion Center of Turkey (IGEME), excluding petroleum and coal, there are 53 exploitable minerals and metals and 4,500 mineral deposits in Turkey. The country is best known for its industrial minerals and primary metallic minerals, with copper and chromite being the most significant minerals in the metals sector.

Gold, however, will be a main focus in the coming years as world demand soars. In 2009 Turkey produced 15 tons of gold, making the country Europe's biggest gold miner. There is an estimated 6,500 tons of untapped gold in the country, and the metal represents one of the main areas the government is hoping to attract private investment. Turkish gold production, however, only covers 10% of the country's domestic demand.

The overall value of the mining sector in 2009 was $7.02 billion, and this rose to around the $7.5 billion mark in 2010. An estimated CAGR of 9.5% will likely see the sector reach a value of $11.8 billion by 2014.

In 2009 mining sector exports accounted for 2.3% of Turkey's total exports. The most significant export items were from the natural stones sub-sector, and copper, chrome, and zinc from the metallic minerals sub-sector. Processed marble alone accounted for $700million of the total export value of $2.4 billion.

Safety remains a concern for the sector. There have been three major disasters since December 2009, and funds allocated to the development of safety standards by the government are expected to lower the amount publicly invested in the development of the sector in production terms.

PRODUCTION

Turkey is a major producer of boron, feldspar, marble, baryte, celestite, emery, limestone, magnestine, perlite, and pumice. In addition, along with global trends, mining activities have recently increased in the production of silver, gold, manganese, copper, and chrome ore.

The majority of production is carried out by the private sector. The public sector is mainly present in coal and metallic ore production, while the private sector is concentrated in industrial mineral production. The main state producers are Eti Maden, Türkiye Taş Kömürü İşletmesi (TKİ), and Türkiye Taş Kömürü Kurumu (TTK).

Turkey is also a significant global player in the production of processed mineral commodities, such as refined borates and related chemicals, cement, ceramics, and glass. The country is also an important producer of ferrochromium and steel.

With anticipated rising production levels as a result of streamlined regulations aimed at attracting investment, mining production is expected to maintain its contribution to total GDP at around 1.1% over the coming years.

MARBLE & OTHER STONES

Turkey has extensive marble reserves—40% of the world's total—and boasts more than 100 varieties. Reserves are estimated at 5 billion cubic meters. The country's annual block production rate is 1,200 tons, and the annual production of tiles and slabs made from marble, travertine, slate stone, tufa, granite, and onyx is 13 million square meters.

According to the General Directorate of Mining Affairs (MIGEM), the production of natural stone is displaying an upward trend. The main products in the industry are andesite, basalt, marble, and travertine.

According to Suat Sarısoy, Chairman of Granitaş, natural stone product exports had a value of over $1.5 billion in 2010, and this reflected that “people are becoming more and more fond of natural stone products".

BORON MINERALS

Turkey possesses two-thirds of the world's borate reserves, and 67% of the global boron reserve. Recent exploration could also boost the figure to 72%. The Emet and Kütahya reserves are the most extensive, with 1.68 billion tons, and the total national reserve is estimated at around 3.06 billion tons, according to Eti Maden.

Eti Maden holds the mining, production, and marketing rights of the boron mineral, and produces colemanite, ulexite, and tincal concentrates, as well as refinery products such as etibor-48, borax, decahydrate, boric acid, and anhydrous borax. It supplies all of its products to world markets, making Turkey the lead exporter of the mineral internationally.

METALS

Turkey has extensive metallic mineral reserves, of which copper is one of the most significant. The country's proven copper reserves are about 3.7 million tons, while total reserves are estimated at 15.8 million tons. The three major reserves are located in the east Black Sea, southeast Anatolia, and Thrace regions. Copper exports totaled $284 million in 2009, with China, Finland, Sweden, and India being the main buyers of rods, profiles, and cables.

Turkey is also a significant producer of feldspar, with 10% of global reserves. It also has a 6% share of world chromite mining, possessing 25 million tons of reserves. Furthermore, Turkey has 169.4 million tons of magnesite reserves, 2.7 million tons of zinc, 2.8 billion cubic meters of pumice, with a world export share of 6.8%, 26 million tons or 2.1% of the world's total baryte reserves, 370 million tons of bentonite and kaolin, half of the world's reserves of perlite, and 40% of the world's stocks of calcite.

Out of Turkey's total 6,500-ton gold reserves, 700 tons are ready for processing. The major locations for gold metal production are Bergama-Ovacık, Gümüşhane-Mastra, Uşak-Kısladağı, and Erzincan-İliç. Turkey's silver reserve is estimated at 6,062 tons, and is concentrated in Artvin, Balıkesir, Elazığ, Izmir, Kütahya, Niğde, Ordu, Sivas, and Erzincan.

In addition, Turkey also has 900 million tons of trona, the second largest reserves in the world after the US. Other important minerals that are commercially produced include plaster, sepiolite, diatomite, zeolite, sulfur, lead, antimony, alumina ore, gypsum, phosphate, salt, sodium, sulfate, quartz, industrial sand, dolomite, talc, wollastonite, kyanite, calcite, emery rock, and calcium fluorite.

EXPORTS

Turkey's main markets for mining sector exports are the EU and Asia. In 2009 exports totaled $2.4 billion, with copper, chrome, and zinc the major metallic mineral exports, while natural stones, borates, feldspar, magnesite, pumice stone, baryte, kaolin, clays, and calcite are the most important industrial mineral exports. China is a significant market, with the country buying the majority of Turkey's total $471 million in block marble exports, as well as buying up 82% of its total $284 million in copper exports, reflecting China's growing domination of the global copper trading system.

The third most important export product is chrome ore and concentrates, with an export value of $268 million in 2009. China is again the main export market, with 88% of exports destined for the Asian giant.

The US is the main destination for processed natural stone, with the country buying up 28% of exports. China is the main destination for natural stone in block form, as well as the main purchaser of natural borates, buying 41% of exports. In addition, China buys 55% of Turkish zinc ore exports, while Italy is the main buyer of Turkish feldspar exports, with 44% of local production supplying the market.

Turkey's mining sector is finally beginning to show the promise it has represented now that laws concerning the industry have been liberalized. In the coming years, the strength of mining's share of exports, and also as a source of other value-added production, is expected to grow.